Effective salesmanship For Insurance business

1. Prospecting

Prospecting may be defined as the art of finding out probable buyers of insurance.
Prospecting is the prime activity on which the entire selling process depends. If a salesman calls on 20 prospects, at least 10 or 12 may grant him a chance to explain how insurance can help them and at least 4 or 5 may eventually buy insurance. Thus it is seen that prospecting leads to calls, calls to interviews and interviews to sales. Prospects are the raw material on which the production of salesman depends; if there is no raw material, there is no production.

Who is a prospect? He will be a person who has a need which insurance can satisfy and who has the capacity to pay the premium. The first task of the salesman is to build up a list of such prospects. There are several methods, and the salesman can use one or more methods suitable to him, these are:
Referred leads: A relative, a friend, satisfied policy holder or even a prospect who has not purchased insurance, may arrange introduction to other persons in need of insurance.
Centers of influence: there are certain persons who command respect and prestige in their own circles. Such persons are secretaries of associations, branch managers of banks, doctors, lawyers, tax consultants, etc. a continuous flow of prospects may be expected through these centers of influence.
Nests: A large business house, an industrial estate, a wholesale market or similar groups form what is called nest. If a salesman gains an entry into these groups, he would have access to a large number of prospects.
Cold canvas: This is calling on a person whom the agent does not know, and to whom he has no introduction. A salesman, who has built up self confidence over a period of several years of experience, uses this method as a routine. Even junior salesman with sufficient self confidence has succeeded in this method.
Policyholders: the existing policy holders themselves are prospects for new and additional business.

The name of prospects should be recorded systematically. The prospects may be classified into different categories according to their insurance need, e.g. householders, small businessmen, exporters and importers,, professional men, trading concerns, contractors, transport companies, manufacturing concerns, etc. this would enable the salesman to adopt the appropriate sales strategy for each class of prospects.

2. Pre approach of preparation for sales talk

Having compiled a list of prospects, the next step is to gather as much information as possible about the prospect, his property, his business, etc. this information will help in identifying the needs of the client and types of covers that he will need, and ascertaining his socio economic background and premium paying capacity.
The information can be gathered from a variety of sources through mutual friends, policyholders, trade associations, the balance sheets of firms, companies etc. the information may be gathered from the prospect himself through s fact-finding interview. In fact, this would place the salesman in a favorable position. The client would consider that the salesman is a professional one who believes in study before sales.

The information that has been secured will enable the salesman to discover the needs of the client, which will in turn determine the type of cover to be offered and the sales talk appropriate for the prospect.

Pre-approach is defined as a complete rehearsal of a sale without the physical presence of the prospect. This means preparation of a sales talk. The sales talk would vary according to the type of prospect and the type of his needs. For example, in selling personal accident insurance, the sales talk suitable for middle class householder would not be suitable for a rich landlord. Similarly, in selling fire insurance, a small shopkeeper would require a particular type of sales talk which will not be suitable for n industrialist. Again, a sales talk which is suitable for a personal accident plan will not be effective for a sale of a fire policy.

Thus, there cannot be a single standard sales talk. The salesman should, there for prepare in advance, basic sales talks for all the situations, and use the right sales talk as occasions demand. This preparation would also include ready answers to all the possible objections which are likely to be raised by the prospect. In short, the pre-approach becomes a complete sales interview without the physical presence of the prospect. A good pre-approach gives the salesman necessary poise and confidence to call on the prospect.

3. Sales interview

The starting point of the sales interview is the preliminary contact or approach. At this stage, the immediate job of the salesman is not to sell insurance but to sell himself. The observations made earlier on the sales personality are relevant in this respect.

A favorable impression will be created on the prospect if the salesman observes certain basic rules. The sales man should fix the appointment in advance, observe punctuality, present a neat and clean appearance with a pleasing smile, and open the interview with greetings to the prospect. The actual sales interview would begin thereafter: through introduction and purpose of calling, he would make himself acceptable.

For reasons already mentioned, it is not possible to give illustration of standard sales interview. However, certain basic rules for conducting an effective interview are dealt with. To start with an interview, it is necessary to explain the basic functions and benefits of insurance in general. This should be followed by pointing out the prospect’s insurance needs and containing the cover available to protect those needs. Briefly, the salesman should explain the risks covered, the risks excluded, the basis of settlement of losses, the claims procedure, and the cost of the policy.
During this exercise, the proposed may be expected to ask questions or raise objections. This is to be welcomed because questions or objections indicate the prospect’s interest in the insurance policy. They also indicate his line of thinking which helps the salesman to adopt a suitable approach to meet the objectives.

Again there cannot be standard answers to objections. The type of questions will indicate the nature of replies to be given. Some of the objections are mere “put-offs” or excuses other objections indicate that the prospect is ignorant of the benefits of insurance or the working of the insurance system.

However there may be real and genuine objections on two grounds: 1. absence of a particular need, and 2. absolute inability to pay. If this is so, it would mean that prospecting and pre-approach have been faulty and it would be wise to give up.

During the salesman interview, the salesman will have to apply motivation. Motivation means making an appeal to the prospect’s emotions rather than his intellect. This can be done by several methods. For example, newspapers cutting of news and pictures of fires, accidents, etc. when shown to the prospect, would move him to action. Real-life situation stories or loses suffered by other policyholders will make him emotionally ready to buy insurance protection.

The conduct of the interview should follow certain other rules. The salesman cannot afford to argue with the prospect. However foolish may be the prospect’s objections, the salesman should not show any trace of irritation and impatience. He should remember that “the customer is always right.” The rule is to agree with the prospect, and then slow politely how he is wrong.

4. Completion

The completion or closing of the sale will follow if the prospecting, pre approach and interview have been done property. The time to close is immediately after the prospect is satisfied that the insurance cover is suitable and desirable. This is the most important stage in the process of selling, when the prospect takes the decision. Too long and too much talk is to be avoided at this stage.

Once the prospect decides to buy, the next step is the completion of the proposal form, if require, and the collection of the premium cheque, if the rate of premium is known. In some cases, the premium will have to be given or confirmed by the insurers. In completion of the forms, the prospect must be guided to follow the instructions of the insurer.

The four stages of the process of salesmanship have been explained. But in actual practice, it may not be possible to draw a definite line between prospecting and pre-approach, or interview and close etc. Salesmanship is not a mechanical process. A salesman deals with people, and no two people are alike or react exactly in the same manner. Over a period of time, the salesman will gain enough knowledge of human behavior to be able to adopt and follow a process of salesmanship suitable to his personality and method of working.